Developers say wind tax credits are not crucial to local projects

NEW IPSWICH - In averting the "fiscal cliff"' last week, Congress also extended tax credits for wind energy development for the next year, but while the news is good for the industry, several developers say they aren't the deciding factor when looking at New Hampshire projects.

The fiscal cliff package includes $12 billion in wind energy Production Tax Credits and Investment Tax Credits for community and offshore projects, according to the American Wind Energy Association. But the credits only apply to wind farms on which construction is started in 2013, leaving energy developers uncertain about the future of the tax credits and thus reluctant to start large projects, the association said.

Adam Cohen, vice president of Pioneer Green Energy, which is trying to build a five-turbine wind farm in New Ipswich and Temple, said the tax credits don't affect New Hampshire as much as they do other places.

"In New Hampshire, where energy prices are so expensive, we can be competitive without the tax credits," he said. "But in other places in the country where energy costs are lower because of cheap coal or natural gas, the credits allow wind energy to compete."

And whether the tax credits continue or are eliminated in the future, wind is going to continue to have a strong presence in New Hampshire because new energy sources are needed and the alternatives, including fossil fuels and nuclear power, come with their own problems, he said.

"Southern New Hampshire needs to get power, so they either need to build new plants or bring it in from other places like the Northern Pass intends to do," he said. "I think people should be building their own energy sources in New Hampshire using New Hampshire labor instead of bringing in energy from other places."

Iberdrola Renewables, a Spanish country, has plants operating in Lempster and Groton, with a third, the Wild Meadows project, proposed for the Alexandria-Danbury area. The plants that are operating now are eligible for the tax credit while the Wild Meadows project, if approved, isn't projected to generate power until 2015, according to project developer Ed Cherian.

"It's a relatively small part of revenue for a wind farm, but it's an important part," Cherian said.

Cherian expects to submit a permit application for Wild Meadows this year. He hopes to receive a decision in 2014 that would allow it to begin operating the following year.

An October report by Continental Economics, an economic and litigation consulting firm in Sandia Park, N.M., called the federal tax credit for wind "economically inefficient. Subsidies distort competitive markets, drive out unsubsidized competitors, and reduce the incentives to innovate and improve efficiency."

U.S. Sens. Jeanne Shaheen, D-N.H., and Kelly Ayotte, R-N.H., voted in favor of the fiscal cliff package, but both raised concerns about the financial effect of extending wind energy tax credits.

Shaheen supports the development of renewable energy, including wind, though she stopped short of saying she specifically supported the wind energy tax credits.

"Clean energy technologies like wind can have enormous benefits for New Hampshire's economy. I support the expanded use of renewable energy as a way to boost our energy independence, protect the environment and bolster our economy, but I am also mindful of the cost of these projects and their impact on New Hampshire communities," said Shaheen. "We should work to modernize our energy infrastructure in a smart, efficient way that protects our way of life and does not add unnecessarily to our debts and deficit."

Liz Johnson, Ayotte's press secretary, said the senator would like to see the playing field leveled for industries by removing tax credits and subsidies instead of expanding them.

"Senator Ayotte believes these and other specific tax provisions benefiting only one specific industry should be considered as part of a broader effort to reform the nation's overly complicated tax code, eliminate tax loopholes and lower overall rates, making all American industries more competitive," said Johnson.